Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in this act:

“Automatic renewal provision”
means a provision under which a service contract is renewed for a specified
period of more than one month if: (1) the renewal causes the service contract
to be in effect more than six months after the day of the initiation of the
service contract; and (2) the renewal is effective unless the consumer gives
notice to the seller of the consumer’s intention to terminate the service
contract.

“Consumer” means a natural
person who buys other than for purposes of trade any tangible personal property
that is distributed in commerce and that is normally used for personal, family,
or household purposes and not for business or research purposes.

“Seller” means any natural
person, firm, partnership, company, corporation, association, or other similar
legal entity engaged in commerce that sells, leases, or offers to sell or lease
any service to a customer pursuant to a service contract.

“Service contract” means a
written contract for the performance of 1[services]service, maintenance,
or repair1
over a fixed period of time or for a specified duration 1in connection
with any real property or that provides a benefit to any real property.

"Warranty" means
a warranty made solely by the manufacturer, importer, or seller of property or
services without consideration, that is incidental to, and not negotiated or
separated from, the sale of the property or services, that guarantees indemnity
for defective materials, parts, mechanical or electrical breakdown, labor, or
workmanship, or provides other remedial measures, including repair or replacement
of the property or repetition of services1.

2. a. Any seller that
sells, leases, or offers to sell or lease any service to a consumer pursuant to
a service contract that has an automatic renewal provision 1[, unless the consumer
cancels that contract,]1
shall disclose the automatic renewal provision clearly and conspicuously in the
contract or contract offer.

b. Any seller that sells or
offers to sell any service to a consumer pursuant to a service contract the
term of which is a specified period of 12 months or more and that automatically
renews for a specified period of more than one month, unless the consumer
cancels the contract, shall provide the consumer with written or electronic
notification of the automatic renewal provision. Notification shall be
provided to the consumer not less than 30 days nor more than 60 days before the
cancellation deadline pursuant to the automatic renewal provision. This
notification shall disclose clearly and conspicuously:

(1) That unless the consumer
cancels the contract the contract will automatically renew; and

(2) Methods by which the
consumer may obtain details of the automatic renewal provision and cancellation
procedure, whether by contacting the seller at a specified telephone number or
address, by referring to the contract, or by any other method.

c. As part of the seller’s
routine business practice, where an error has caused the failure to comply with
the provisions of this section, the unearned portion of the contract subject to
the automatic renewal provision shall be refunded as of the date on which the
seller is notified of the error.

1d. The seller
shall provide written notification to the consumer not less than 30 days nor
more than 60 days before any change in the procedures required of the consumer
to cancel the automatic renewal provision.1

3. The following shall be
exempt from the provisions of this act:

a. warranties;

b. 1[maintenance agreements;

c. ]1 service
contracts on tangible property if the tangible property for which the service
contract is sold has a purchase price of $250 or less, excluding sales tax;

1[d.]c.1 service
contracts with a bank, trust company, savings bank, savings and loan
association, credit union, insurance company, or health maintenance
organization organized under the laws of any state or the United States; and

1[e.]d.1 service
contracts issued, offered, or sold:

(1) by a public utility to
the extent that the public utility is regulated by the Board of Public
Utilities, or by a person providing central heating and air conditioning
services 1[, but only with respect
to a service contract regarding the product sold to a consumer, or installed or
repaired for the consumer at the consumer’s household, by the utility or by a
person providing central heating and air conditioning services]1; or

(2) to any person other than
a consumer.

4. a. This act shall not
limit rights or remedies available to a consumer under any other law.

b. If a seller does not
comply with the provisions of this act, the automatic renewal provision shall
be void and unenforceable.

5. A violation of any of
the provisions of this act shall be an unlawful practice and a violation of
P.L.1960, c.39 (C.56:8-1 et seq.).

6. This act shall take
effect on 1[January 1, 2011]the first day of
the third month following enactment1,
and shall apply to service contracts entered into on or after that date.